The stock market is currently experiencing a sharp downturn, with recession fears causing widespread panic among investors.
However, this gloomy price action may be creating an ideal environment for strategic dip-buying, particularly in the artificial intelligence (AI) sector.
With AI technology rapidly advancing and its market expected to grow from $214.6 billion in 2024 to $1.34 trillion by 2030, investing in AI stocks now could yield substantial long-term gains.
Picks for you
A closer look at economic indicators such as rising GDP and anticipated Federal Reserve rate cuts reveals a more resilient landscape despite recession concerns. In this context, Finbold has analyzed ongoing trends and identified two top investment opportunities amidst the current artificial intelligence tailwind.
Micron Technology Inc. (NASDAQ: MU) stock
Micron Technology (NASDAQ: MU) emerges as a strong candidate for investment amidst the current market conditions. The company, a leader in memory and storage solutions, is making significant strides in high-bandwidth memory (HBM) production.
These efforts are expected to drive substantial revenue growth, with projections of billions in sales by fiscal 2025 compared to hundreds of millions in 2024.
Micron’s extensive market reach, which includes personal computers, mobile, automotive, industrial, and data centers, positions it well to benefit from the proliferation of AI-powered devices.
Analysts predict a significant rebound in Micron’s earnings for fiscal 2024, with an expected 687% surge in earnings per share (EPS) and a 54% increase in sales. Although the stock has recently dipped below its 200-day moving average, it has still gained 8.5% this year.
Micron’s market cap stands at $113.7 billion, and the company is set to announce its Q4 earnings on September 25. Analysts forecast a profit of $0.97 per share, a remarkable turnaround from a loss of $1.21 per share a year ago.
The consensus among analysts is overwhelmingly positive, with a “Strong Buy” rating and an average target price of $169.04, indicating a potential upside of 86.95%.
Dell Technologies (NYSE: DELL) stock
Dell (NYSE: DELL) is undergoing a reorganization to streamline its operations and enhance its focus on artificial intelligence.
This includes creating a new group dedicated to AI products and services as part of this reorganization. Despite recent stock price fluctuations, Dell has experienced a resurgence of investor interest due to its high-powered servers capable of running AI workloads.
Dell’s strategic partnerships and focus on AI innovations position it well for future growth. For instance, its collaboration with Nvidia (NASDAQ: NVDA) on the upcoming Blackwell chip and involvement in Elon Musk’s xAI data center project in Austin highlight its strong AI market potential.
In Q1 fiscal 2025, Dell reported $22.2 billion in revenue, a 6% year-over-year increase. However, operating income fell by 14% to $920 million, and adjusted diluted EPS decreased by 3% to $1.27.
Despite these challenges, Dell’s backlog of AI-optimized servers grew by over 30% to $3.8 billion, indicating strong demand. Currently trading around $108, down from a high of $179.70, Dell’s stock still boasts a 40% return since January.
The consensus among analysts is overwhelmingly positive, with a “Strong Buy” rating and an average target price of $158.5, indicating a potential upside of 61.4%.
In the face of current market volatility, both Micron Technology and Dell Technologies present compelling opportunities for investors.
Their strong positions in the AI sector, coupled with strategic investments and robust market demand, make them attractive buys amid the artificial intelligence tailwinds.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
